Toyota Reorders Worldwide Management Structure - Complete Details

Toyota City, Japan, March 2, 2016―In keeping with its overarching goal of making ever-better cars by promoting the continued development of a talented workforce, Toyota Motor Corporation (TMC) will make substantial changes to its structure in order to streamline work processes on a company-wide basis. The changes will take effect starting this April.

To date, TMC has already implemented major structural changes in its efforts to make ever-better cars, enhancing the strength and autonomy of regional operations, and emphasizing the importance of genchi-genbutsu (on-site learning and problem-solving) in training personnel. Specifically, in 2011 TMC reorganized its structure with the aim of promoting autonomous region-based management, and in 2013 the company split a significant portion of its automotive operations into four business units. Despite these structural changes, however, TMC still relies greatly on individual efforts made by its own team members and stakeholders due to its present structure and work processes, and in many cases, cross-functional coordination has been found to consume a disproportionate amount of time and effort.

As such, the fundamental goal of this overhaul is to create a company built around product-based organizations, rather than function-based organizations. Doing so will enable the dissolution of barriers within the company and eliminate unnecessary coordination work, thus helping to ensure that all team members' efforts will be leveraged toward the purpose of making ever-better cars and developing a talented workforce.

TMC is confident that significant value can be added through this new management structure, in which nine product- and region-based business units will compete with and learn from one another, while operating alongside TMC's Head Office (responsible for corporate functions).

"This structural change may not be the ultimate solution, but it is certainly an opportunity," said TMC President Akio Toyoda. "I would like to make this an opportunity to strengthen our workforce and further promote making ever-better cars. Whether or not this structural change turns out to be the right solution or not is in our hands," he added.

Details of these and other organizational and executive changes can be found below. The executive changes will take effect on April 1, while the organizational changes and personnel changes will be effective from April 18.

• To link work processes ranging from R&D to manufacturing, thereby enabling the development of ever-better cars and strengthening TMC's workforce
• To enable individual business units to make decisions more quickly and independently
• To strengthen the functions responsible for formulating mid-to-long term objectives and corporate strategies

1. Creation of product-based in-house companies

Seven product-based in-house companies will be responsible for short- to mid-term product strategy and development.

• Innovative R&D and Engineering Company
• Toyota Compact Car Company
• Mid-size Vehicle Company
• CV Company
• Lexus International Co.
• Power Train Company
• Connected Company

R&D, production engineering, and manufacturing operations, which are organized by function at present, will be divided into "advanced" and "mass production" categories, and then allocated to each company. Toyota Group affiliates responsible for vehicle development and production will also contribute to these in-house companies where necessary.

To help streamline operations from planning through to manufacturing, full responsibility and authority will be given to the president of each in-house company.

2. TMC's two region-based business units, Toyota No.1 and No2, will be maintained and strengthened

A strong local presence in markets around the world will continue to allow Toyota to engage new fans and build strong regional operations. TMC's existing region-based business units, Toyota No.1 and No.2, will serve to check and balance the operations of the new product-based in-house companies.

To streamline the development of products that can quickly meet local needs, discretion over the use of a certain amount of R&D resources will be allocated on a region-specific basis.

1. Establishment of the Frontier Research Center

The role of the Frontier Research Center will be to develop new technologies and business models from a long-term, society-based perspective, actively seeking input from external research organizations and Toyota Group members.

2. Reorganization of certain divisions not belonging to a group (establishment of the Corporate Strategy Division)

Mid- to long-term strategic planning functions will be grouped under the Corporate Strategy Division, with the aim of determining future strategic directions and optimizing operational resources.

3. Other divisions not belonging to a group, and other groups

Changes will be made to support the operations of each business unit in such areas as profit and cost management capabilities and administrative systems. Additionally, certain functions will partly be transferred to in-house companies.

1. Executive Changes

Changes to board members as of the day of the 112th General Shareholders Meeting

The formal appointment of board members and audit and supervisory board members will be made pending approval at the 112th General Shareholders Meeting. The formal assignment of responsibilities to board members, and the appointment of board members with the legal status to represent TMC (representative directors), will be made at the board of directors meeting following the 112th General Shareholders Meeting. The resignation of board members leaving their current posts will become official on the day of the 112th General Shareholders Meeting.

Executive lineup (candidates) following the 112th General Shareholders Meeting

2. Organizational changes effective April 18, 2016

3. Personnel Changes

1. Executive general manager changes effective April 1, 2016